Russia’s Rusal, the largest aluminium producer outside China, reported a remarkable 42% increase in its first-half adjusted net profit, driven by significant cost reductions that offset a decline in sales and prices. The company announced this growth despite facing challenges due to geopolitical tensions stemming from the Ukraine conflict, which have led to decreased demand from Western consumers.
In April, the London Metal Exchange implemented a ban on Russian aluminium, copper, and nickel, further complicating Rusal’s market position. The company noted that ongoing uncertainties in the global economy, weak demand, and new restrictions on Russian metals have negatively impacted its operational performance.
Rusal’s first-half sales fell by 2.9% to 1.879 million metric tons, while production increased by 2.3% to 1.957 million tons, primarily due to enhanced output from the Taishet plant. Notably, deliveries to China reached record levels, with the Chinese market now representing a significant portion of Rusal’s revenue.
Asia accounted for 42% of Rusal’s revenue in the first half of 2024, up from 33% during the same period in 2023. The average price of aluminium on the London Metal Exchange was $2,360 per ton, while Rusal’s own metal price dropped by 2.2% to $2,447 per ton.
Despite a 4.2% decrease in revenue to $5.695 billion, a substantial 15.9% reduction in costs, largely attributed to lower raw material prices, led to an increase in profits. Rusal’s CEO, Evgenii Nikitin, emphasized the company’s focus on achieving material self-reliance and expanding production capabilities, including plans for a new alumina plant in Russia.
Adjusted EBITDA surged by 171% to $786 million, while adjusted net profit reached $446 million, compared to $315 million a year earlier.